Historically, law firms have operated under the assumption that applying for litigation funds means being at the mercy of litigation finance companies. But contrary to popular belief, there are actually many ways you can tip the scales in your favor and secure the terms you deserve.
Today, I’m breaking down the top 5 litigation finance hacks that lenders don’t what you to know about so that you can take a more strategic approach toward applying for your next loan.
1. When You Apply Matters
One thing that attorneys need to remember is that litigation finance firms are a business just like anything else. That means that they operate on a traditional fiscal calendar, and the timing of your loan application can substantially impact your chances of being approved.
For instance, applying at the beginning of the year gives lenders little incentive to approve your funds since they still have an entire fiscal year to meet their deployment goals. However, applying before year-end, or even at the end of a fiscal quarter, increases your odds of approval, as lenders will be preparing to showcase their numbers to investors and shareholders. We realize that if you are in need of funds, it's difficult to delay your request, but if you have the flexibility, its worth considering.
2. You Should Shop Around For Funding
Let's face it, applying for litigation finance is difficult and time consuming. Because of this, we understand that you only want to apply to one company. And, it’s natural to jump at the first offer of litigation finance funds you receive. After all, the sooner you get your funds, the sooner you can move on with your case, right? On the contrary, you should shop around and compare offers before you make your final decision. In many cases, litigation finance companies will attempt to lock you into an exclusive deal before you’ve had the chance to weigh your options. But by shopping around, you can leverage your law firm's strengths and create competition amongst potential lenders, which will only improve your financing terms in the long run.
3. Not All Loans Are Created Equal.
Speaking of comparing loan offers, you should also keep in mind that not all litigation financing deals are created equal. That’s why it’s essential to clearly define the financing structure, terms, and interest rates you’re looking for before you start the application process. This saves you the time and hassle of comparing third-party funding structures that don’t meet your needs and eliminates the risk of committing to a loan that won’t benefit your firm.
4. You Have The Power to Negotiate
Attorneys are trained to be experts in the art of negotiation, but surprisingly we don't see them use this skill when seeking litigation finance. Even if you've been offered a particular set of terms from a potential lender, you still have the power to negotiate nearly all of the particulars of your loan. Everything from your interest rate to the waterfall of litigation funds can be negotiated, and most litigation finance firms are willing to work with you to find a reasonable agreement.
5. Lender Reputation Isn't Everything
Of course, having a lender with a strong reputation is always a positive when securing litigation finance funds. But you might not realize that there are some instances in which reputation carries less weight.
Say you’re applying for a loan with drip funding, and you’ll be working with your lender for the duration of your case, most likely years. Experienced funders have years of experience seeing litigation play out. They actually have been involved in more litigation than even the most experienced litigator. This experience can be invaluable and paying a premium to work with a top finance company is worthwhile.
However, say you're looking for financing with a one-time pay-out on a settled case, and you won't need ongoing support from your lender, then you can save yourself a sizable premium and choose your loan weighing price and terms more than reputation.
How to Find Quality Litigation Finance Support
Applying for a loan through third-party funding can be stressful, even for the most seasoned legal counsel. REMO was founded on the principle that litigation finance should be fast, simple, and transparent. Our innovative approach to securing litigation funds takes the time, hassle, and headache out of the loan approval process, and we work with you every step of the way. Learn how REMO can help you find the funds you need today.
